United States v. Moparty

• Decision Date: 23 August 2021
• Docket Number: No. 19-20797,19-20797
• Citation: 11 F.4th 280
• Parties: UNITED STATES of America, Plaintiff—Appellee, v. Dayakar MOPARTY; Harcharan Singh Narang, Defendants—Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

11 F.4th 280

UNITED STATES of America, Plaintiff—Appellee,

v.Dayakar MOPARTY; Harcharan Singh Narang, Defendants—Appellants.

No. 19-20797

United States Court of Appeals, Fifth Circuit.

FILED August 23, 2021

Eileen K. Wilson, Carmen Castillo Mitchell, Assistant U.S. Attorneys, U.S. Attorney's Office, Southern District of Texas, Houston, TX, for Plaintiff - Appellee

Michael McCrum, McCrum Law Office, San Antonio, TX, Steven Jeffrey Lieberman, Houston, TX, Nathan J. Mays, Esq., Schaffer Carter Kennedy & Mays, Houston, TX, Seth Kretzer, Law Office of Seth Kretzer, Houston, TX, for Defendant - Appellant

Before Jones, Southwick, and Costa, Circuit Judges.

Edith H. Jones, Circuit Judge:

Dr. Harcharan Singh Narang and Dayakar Moparty were convicted of health care fraud, conspiracy to commit health care fraud, and money laundering. They both assert alleged errors in the trial and sentencing. Moparty further challenges the sufficiency of the evidence supporting his convictions. Some inexcusable trial errors were committed or permitted by the government, which counsel on appeal explained as the reason for an incredibly long (132-page) appellate brief: the government wanted to make abundantly clear that the errors were "harmless." Nonetheless, we AFFIRM.

I. BACKGROUND

This direct criminal appeal stems from various federal health care fraud convictions. On May 17, 2017, a grand jury indicted Narang, Dr. Gurnaib Singh Sidhu, and Moparty on one count of Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349 and seventeen counts of Health Care Fraud in violation of 18 U.S.C. § 1347. It further indicted Narang and Moparty on three counts of Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity in violation of 18 U.S.C. § 1957.

Narang is an internist who practiced at his self-owned clinic, North Cypress Clinical Associates, P.A. ("North Cypress") in Cypress, Texas. Sidhu also practiced as an internist and was employed by Narang, primarily at the second North Cypress office.¹ Moparty co-owned Red Oak Hospital ("ROH") and served as an administrator for Spring Klein Surgical Hospital DBA Trinity Health Network ("Trinity" or "Spring Klein"). Trinity provided staffing and administrative services to a number of health care entities including Cleveland Regional Medical Center ("CRMC"), 2920 ER, 2920 Open MRI Digital Imaging, ROH, and Cleveland Imaging and Surgical Hospital DBA Doctor's Diagnostic Hospital ("DDH").

The indictment alleged that Narang, Sidhu, and Moparty conspired to and executed a scheme where Narang and Sidhu ordered unnecessary medical tests for patients and then authorized Moparty to bill for these tests through ROH at the higher hospital rate even though these patients were seen and treated at Narang's North Cypress office. Further, when insurers denied claims originating from ROH, Moparty would resubmit them from another entity associated with Trinity. The indictment alleged that this scheme resulted in fraudulent billing of over $20 million to Blue Cross Blue Shield, Aetna, and Cigna. Those companies paid Moparty at least $3.2 million in reimbursement for those claims which he allegedly split with Narang through a series of financial transactions.

An eight-day jury trial began on February 11, 2019.

A. The Government's Case-in-Chief

At trial, the government introduced extensive testimony to demonstrate how the scheme operated. As the government describes, the scheme had three key parts: (1) a patient intake and testing component; (2) a billing component; and (3) a financial distribution component.

1. Patient Testing

In 2013, Forever Fit Wellness Center, PLLC ("Forever Fit"), a "medi-spa"—owned by Narang's wife Ranjit Kaur—that shared office space with North Cypress, began offering coupons for "Lipotropix weight-loss shots" on Groupon. The coupon offered weekly injections but required the purchaser to perform a 30-minute consultation with a medical professional prior to beginning the regimen. At trial, four women who purchased these coupons and Rikesha Burton, Narang's former medical assistant, testified about the process. Upon arrival at Forever Fit, the patients were asked to fill out medical and personal history forms. After completing these forms and undergoing a vitals check, the patients were seen by Narang. During the consultation, Narang would ask wide-ranging questions related to dizziness, headaches, backaches, or other generic ailments. Even though these women indicated they were in relatively good health and that the weight loss shot was the primary reason for the visit, Narang's open-ended questioning elicited affirmative answers from the patients.

Narang then persuaded the patients to undergo brief testing at North Cypress and explained that their insurance would cover any costs and they would not pay anything.² Narang would then typically order cardiac and/or abdominal ultrasounds, ENGs, nerve conduction tests, electromyography tests, allergy tests, and artery and/or vein doppler tests. Approximately 80–90% of Groupon patients with insurance received this battery of additional tests—all patients getting the injections were required to have an EKG performed. Burton testified that she and other medical assistants sometimes warned Groupon patients that they were not obligated to undergo additional testing. Burton also testified she was later reprimanded for doing this. After Narang ordered the tests, the testing orders were typically approved under Sidhu's name although he did not see the patients. The tests were then performed at the North Cypress location.

This same pattern also occurred with patients who visited Narang for medical treatment unrelated to the Groupon injections. One patient in acute pain sought medication for an ulcer. She saw Narang and received an echocardiogram and nerve conduction velocity test despite a lack of underlying symptoms that would warrant those tests.

The government presented four expert witnesses who testified regarding the medical necessity of the testing ordered by Narang. First, Dr. Richard Gans, a vestibular and balance disorder specialist, reviewed a sample of 29 patient files. He found that key data were often missing, such as calibrations results and the actual test recordings, rendering the test results useless.

Second, Dr. Rubina Wahid, an allergy and immunology specialist, examined 33 patient charts and found no conclusive indicators that would warrant allergy testing. Further, Dr. Wahid noted that tests had been improperly performed and recorded, and the files were missing detailed patient histories, assessments, plans, discussions of results, and follow-ups. Finally, Dr. Wahid testified that the patients presenting for weight loss injections were documented to have a variety of maladies and received a "battery of tests."

Next, Dr. Peter Grant, an internist with an expertise in electrodiagnostic medicine, reviewed tests for 68 patients and determined that 83–94% of the tests were not medically necessary. Further, Dr. Grant found the tests were "fraught with errors and inaccuracies" and approximately 80% of the tests were "worthless."

Finally, Dr. Michael Bungo, a cardiologist, reviewed 40 patient files. The majority of the files he reviewed were 30–68-year-old females with low statistical probability of cardiovascular disease. He disparaged the idea that many patients would exhibit the very same array of symptoms³ as "so medically improbable that it bordered on impossible" and that he didn't "have 40 people in thousands of patients that all present with the constellation of symptoms that are identical." Further, Dr. Bungo observed that analysis of the patients by Narang was lacking, appropriate tests were not ordered, doctor's notes were missing or contradictory when present, and testing was unrelated to patient symptoms.

Additionally, the government called Dr. Aditya Samal, a board-certified cardiologist, as a fact witness. Narang had hired Dr. Samal to read echocardiograms and vascular studies. Narang sent Samal approximately 800 studies in one year, a number that Samal noted was unusually high. Further, Dr. Samal explained that the quality of the tests fell below appropriate medical standards—some had been done months earlier and most were medically unnecessary based on the patient's symptoms, age, and sex. This reflected a pattern of "low quality, inappropriate studies" and caused Samal to end the arrangement.

2. Billing Practices

The crux of the government's argument was that Narang and Moparty executed a "pass-through billing scheme" where services are rendered at one location, but the bills are submitted from a different place at a higher rate. Central to this theory was the testimony of Keon Warren, Moparty's billing director.⁴ Warren testified that in 2012 he met with Moparty, Narang, and Kaur—Moparty explained that they were going to be billing for Narang's office which would function as "an extension of the hospital, part of the HOPD [hospital outpatient department]." Pursuant to this arrangement, Warren "would get directions ... as to what we were going to bill" and "receive the emails, what's going to be on them, what we're going to be billed, and so forth." These emails included the patients’ demographics, their forms and signatures, insurance information, tests, and billing codes—all the information needed to generate the bills. Warren would then prepare the claims to bill the patients’ insurance companies.

Moparty was copied on these emails and provided Warren instruction. Initially, the tests were billed through DDH, beginning during the summer of 2012. Then in late 2012, billing shifted over to 2920 ER (or Trinity Healthcare as it was also known) after it received a freestanding emergency center license. Finally, in March 2013 billing shifted again to ROH. Moparty informed Warren that Narang's office was going to be an extension of ROH and showed him an email representing this. Thereafter, all billing flowed...